Many US consumers adopted a frugal mindset during the recession, stretching their dollars with coupons found online as well as in newspapers and magazines. Print coupons still dominate, but digital coupons have quickly gained mainstream acceptance.
This year, more than half of US adult internet users, or 102.5 million people, will redeem a digital coupon via any device for either online or offline shopping. New data indicates that there was a significant increase in the number of digital coupon users during the first half of 2013. Based on this, eMarketer has increased our forecast for the US digital coupon audience beginning this year. We expect the number of people who redeem digital coupons to increase 11.0% this year, up from our previous estimate of 4.6%. New mobile coupon users will be the primary growth driver in the US digital coupon audience.
Mobile has played a significant part in digital couponing in 2013—more than 28% of people who own a mobile device redeemed a coupon this year. Nearly 70% of mobile coupon users will access coupons via smartphone. eMarketer has revised our projections for the number of US adult smartphone coupon users upward from our previous forecast to reflect the increase in digital coupon redemption during H1 2013. We expect one one-third of all smartphone users ages 18 and older, or 42.1 million people, to use a coupon obtained via app, mobile internet, mobile barcode or SMS this year.The US adult smartphone coupon user base is up 40.9% this year, following 60.6% growth in 2012. New smartphone users, as well as the growing popularity of new mobile apps, local deals, and the integration of couponing into social networks will he! lp fuel increases.
Fujitsu demos ad transmission technology, sends info from TV to handset via smartphone camera (video)
Another easter egg at Fujitsu’s CEATEC booth was a system for transmitting coupons, URLs and other digital information from a TV screen to a user’s smartphone. We’ll back up a bit: the data ends up on-screen in the first place thanks to information embedded in light flashing at various levels of brightness (the frame rate is too quick to be detected by the human eye). Theoretically, when a viewer is watching a commercial, they’ll see a prompt to hold up their phone’s camera to the screen, and doing so will bring up a corresponding coupon or website on their handset — it takes about two to three seconds here for the recognition. The embedded information covers the entire panel, so users don’t need to point their device at a particular section of the screen.
In Fujitsu’s demo, pointing a smartphone at the TV pulled up a website on the phone. It only took about a second for the URL to pop up on the device, and there was no noticeable flickering on the TV itself (essentially, the picture looks identical to what you’d see on a non-equipped model, since your eye won’t notice the code appearing at such a high frequency). The company says this technology works at a distance of up to two or three meters. Head past the break to take a look at the prototype in action.
Fujitsu demos ad transmission technology, sends info from TV to handset via smartphone camera (video) originally appeared on Engadget on Tue, 02 Oct 2012 16:42:00 EDT. Please see our terms for use of feeds.
UPDATE: Groupon/Gap ended up selling over 440,000 “$50 for $25 Groupons” by the end of the day. That’s $22 million of merchandise that consumers bought for $11 million. From this net, Gap would split some portion to Groupon, which means Gap “took home” something south of $11 million (could be as little as $5.5 million if Groupon’s typical 50/50 split held true). So the bottom line is both Gap and Groupon got huge publicity from the promotion and they got sales — indeed “cash in hand” — but if these sales were breakeven or negative in profitability, would Gap have been better off NOT running the promo? Even if these sales got people into the stores that would not have normally gone to the stores, Gap just bought the traffic by paying off customers; will they ever come back and spend any more?
Groupon is great … and a great success story. But there are certain times when an advertiser should NOT use Groupon — unless they are in the business of losing money. One such example below… as of 4:15 pm on the day of the deal 10,648 Groupons purchased (NY stats) — which translates into $266k lost revenue (multiplied by the $25 they gave away free).
Then again, this is still way cheaper (less money lost) than the millions wasted on TV ads — so I’ll take my statement back IF the advertising manager at GAP took dollars out of TV budget to spend on this.
P.S. no, the free publicity they are getting from this is NOT worth it because the more publicity they get, the more money they lose.
P.P.S. no, “breakage” (people forgetting to use the groupon they paid for) is NOT a business model
P.P.S. no, the “halo” effect (that people may end up buying more) is unpredictable and may be better for some products and brands and worse for others
Following a leveling-off period from 2006-08, coupon redemptions grew by 27% in 2009, according to analysis by The Nielsen Company.
News of the Coupon’s Death is Greatly Exaggerated After reaching a peak of 4.6 billion redemptions in 1999 (according to Inmar), annual coupon use by US consumers sank to a low of 2.6 billion for the three-year [...]<img src="http://feeds.feedburner.com/~r/marketingcharts/~4/D3SJYD6L0qE" height="1" width="1"/>
coupon sites: definitely headed upward with a spike in Dec 08.
network TV sites are seeing healthy increases, likely due to “view full episodes” on their websites – but even this increase in traffic will not replace the advertising revenues lost on network television
how do we judge the relative merit and effectiveness of different types of advertising? By finding a common parameter that can be used to compare “apples to apples.” We argue that cost of customer acquisition is a great candidate for such a parameter.
For example, if television advertising cost $50 million to produce and air, and 1,000 people came to the acquisition website, and 10 people applied for and received credit cards then the CCA — cost of customer acquisition would be $5 million ($50 million / 10 people who got the credit card). Of course television advertisers would claim that the “impressions” from TV would have “branded” millions more people and they would eventually get a credit card from the company. That’s possible. But for the purposes of this exercise, if there is no absolute end-to-end tracking, we don’t count it. Because, for example, many other possible scenarios can also occur, like the person saw this ad for a credit card but ended up getting a card from a different bank, they saw and remembered the ad but they already had several credit cards from the company, etc.
With “online” we can easily see lift in search activity around the time that brand/awareness advertising is in-flight. This is one of the best indicators of interest — the person saw the TV ad, and was inspired enough to go online to do more research to inform their own purchase decision. Modern consumers will typically search and then click through. In rare instances, they will type the URL, but it is usually the domain name, not the special URL — domain_name.com/special_url — just because of pure laziness or simply because they forgot the /special_url portion.
Now let’s look at a print example: a print ad cost $5 million to produce and traffic in targeted magazines. About 1,000 people came to the website and 10 people ended up purchasing the advertised product. So the CCA is $500,000 per customer acquired. There may be more people who saw the ad and eventually came in to buy a product. But again, there is a problem of attribution.
Now a final example from “online” marketing. Search ads were run using Google Adwords and a $1 CPC (cost per click) was paid. Of those people who clicked through 1 in 20 purchased a product. So it took 20 clicks at $1 each to achieve 1 sale – so the cost of customer acquisition is $20.
OK, so what about prodycts not sold online? We can use a proxy which has a known conversion to sales. For example, once a coupon is printed from the website, from historic data the advertiser knows that 30% end up using the coupon – i.e. redeeming with a purchase. So, again, if we used a $1 CPC and 1 in 20 ended up printing the coupon and 30% of those “converted” to an offline sale, the CCA would be $66.67 ($20/0.30).
So to recap
Television – $5 million CCA
Print – $500,000 CCA
Paid Search – $20 CCA
Paid Search + Offline Sale – $67 CCA
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
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